Quick and Complete

Roadrunner Markets refines its retail operations with the addition of a c-store prototype, a renewed commitment to foodservice and a firm emphasis on customer service.

By John Lofstock, Editor.

At a time when customers demand fast service, quality foods and convenient locations, Roadrunner Markets is pushing ahead with a retail strategy that would make even Wiley E. Coyote proud.

“This is a great industry with tremendous opportunities,” said Ryan Broyles, the second-generation president and CEO of Roadrunner Markets, part of Mountain Empire Oil, the company started by his father, Warren Broyles, 35 years ago. “But like all retail, you can’t stand still. You have to constantly refine your offering to meet the demands of today’s busy consumers. That is our biggest challenge and our biggest priority.”

To that end, Johnson City, Tenn.-based Roadrunner, which operates 92 stores in four states, put forth a mission statement it proudly declares in all its convenience stores: “To delight the customer in a way that makes them come back tomorrow.”

The mission statement serves as both a promise to customers and a reminder to employees of how important their job is. “Our mission statement is to go after the customer today in a way that makes them want to come back tomorrow and always,” said John Kelly, vice president and chief operating officer of Roadrunner Markets. “Our repeat customers are the very core of our business. We love attracting new customers, but that truck driver or the office worker that is in the store 4-5 days a week—sometimes twice a day—is what keeps this industry growing.”

Delighting the customer with a warm, friendly retail environment helps perpetuate Roadrunner’s value proposition. “There is no magic bullet when it comes to serving our customers,” Kelly said. “We know we have to consistently meet their needs every time they walk through our doors. If we do that, they will spread the word to other customers.”

To that end, stores are routinely inspected for cleanliness, employees wear crisp uniforms—complete with name tags—and they are trained to answer questions so no customer leaves unsatisfied. “It’s this consistency and super friendly service that we provide 24 hours a day, 365 days a week that keeps customers coming back,” Kelly said.

Designing a StrategyAfter several years of planning, the changes are coming fast and furious. Roadrunner opened its prototype store in 2010. The design is much larger than the chain’s original footprint varying between 4,000 and 5,000 square feet, depending on the size of the lot. With an attached Dunkin’ Donuts, which adds another 2,000 square feet, the expansive building could measure more than 6,000 square feet.

The first unit in Tennessee is a spacious 4,500-square-foot store that features eye-catching yellow, red and black colors, strong in-store programs and an equally attractive forecourt befitting of a flagship store.

The transparency of the store’s design exudes confidence. Among the highlights of the prototype are dramatically improved lighting and signage with strong visibility from the surrounding roads, a unique Roadrunner brand sign spans the building and large glass windows provide a clear view inside the store. The store also has automatic sliding doors to enhance the upscale sales experience.

With the bright colors, open airy lot and state-of-the art lighting, the unit seems to take on the look and feel of an upscale shopping center, which is just the look Broyles was aiming for. “In the new store, we wanted something that was distinctly Roadrunner,” he said.

Roadrunner stores feature a variety of fuel brands, including BP, Shell and Sunoco.

The company also has a handful of dealer operated sites, which it plans to deemphasize going forward. “At some point we made the decision that the focus of our company is the company-operated model,” Broyles said.

Other features that are distinctly Roadrunner are the multiple destination points inside the store. Customers are greeted by a large front counter that spans about 20 feet with two checkout registers to offer faster service.

Anchoring the convenience store offering is the company’s proprietary dispensed beverage service. The coffee program, supplied by S&D Coffee, is branded Java Lane. The cold and frozen dispensed beverage section, which includes f’real shakes and an iced coffee bar, falls under the Icy Road brand.

The prototype design also boasts an expansive beer cave measuring about 300 square feet. The beer cave is equipped with LED lighting and large assortment of single beers and multipacks. The cold vault for nonalcoholic beverages is 13 doors.

As the chain was preparing the new design, it took the time to update some of its retail technology, which included investing more than a half-million dollars to upgrade the fuel pumps to be PCI compliant and installing VeriFone’s Sapphire point-of-sale (POS) solution.

The systemic technology upgrades have resulted in better reporting to get a much closer look at sales in real time, Broyles said.

Plus, the enhanced platform helped the company seamlessly integrate the fuel loyalty programs offered by BP and Shell.

Each convenience store is staffed with a manager, an assistant manager and sales associates who work various shifts to enable most stores to remain open 24 hours a day, seven days a week. The field operations group is comprised of two division operations managers and nine area operations managers who, along with corporate management, evaluate store operations. Area operations managers typically oversee approximately 8-14 stores each.

Expanding FoodserviceWhile outstanding service and strong locations are the backbone at Roadrunner, the chain recognized it needed to expand its foodservice offering. In addition to adding new locations, Roadrunner became a Dunkin’ Donuts franchisee in 2010. It now has three locations and aims to open seven more over the next few years. The company’s store development agreement covers 16 counties in Tennessee and Virginia.

“Partnering with a brand like Dunkin’ Donuts is a very big deal for us in this market,” Broyles said.

In addition to Dunkin’ Donuts, Roadrunner leases in-store space to Subway, Burger King, Huddle House and Krystal. It also has three locations with Hunt Brothers Pizza and two locations with Chester’s On the Fly Chicken.

“Foodservice is one area that we are very high on now,” Broyles said. “We are looking at other franchise opportunities and other avenues that would expand our foodservice operations in terms of what would be a good fit for our markets and for our customers. We have a much better handle on how to be a great foodservice operator so all opportunities, whether it be a commissary approach, landlord-tenant approach or another franchise, are on the table right now. The important thing is finding the right fit to boost sales.”

Roadrunner’s initial experience as a foodservice operator was less than stellar. In the 1980s, the company opened a proprietary deli business and offered a full menu of hot dishes at a number of stores. “It turned out to be a bad experience because we didn’t fully understand the food business,” Broyles said. “We were generating strong sales, but were having a hard time finding the right people and controlling costs.”

As a result, the company decided to get out of direct operations and bring in more experienced marketers to lease the space. “Even back then, we understood that foodservice is an attractive draw for our customer base, so we decided to get into more of a landlord-tenant model for QSRs,” Broyles said. “We continued on that path for quite a while, until we felt we were really ready to operate a foodservice program on our own. That’s when we decided to make the move with Dunkin’ Donuts as a full blown franchisee.”

While being a foodservice franchisee offers a whole new set of challenges and drastically shifts the corporate culture from a retail mentality to a foodservice focus, the chain feels it is getting much more control over its operations.

“Our franchisees are very good at what they do, but, these days, with the amount of time and money we have invested in these sites, we would prefer to retain more control over foodservice operations,” Kelly said. “When you are not the operator and there is a problem with one of the tenants, the customers see your brand, so you have to move quickly to resolve these issues. At the end of the day, it’s an operational issue and we would prefer to have more control.”

Building TrustAs foodservice is positioned to take on greater importance for the company going forward, the chain made the decision to emphasize a brighter, upscale design that began with elegant restrooms.

“Clean, attractive restrooms have become a must-have for any convenience store chain that is looking to capture a greater share of the customers’ foodservice dollars,” Kelly said. “The new facilities are a hit with our customers. The feedback and the lift in sales at these new stores have been tremendous.”

Reinvesting in the business during these trying economic times may sound risky, but for Roadrunner, the risk of not meeting its customers’ expectations could carry far worse consequences.

“The competition has really stepped up its game in our markets over the past few years,” Broyles said. “Chains like Walgreens, Kroger, Walmart and the Dollar Generals of the world are aggressively expanding their offerings to include things like beer and even foodservice. They are moving into lots that they are picking up for pennies on the dollar, giving them a very lean operating model. It’s forcing us to raise our game and definitely something all convenience store operators need to keep an eye on.”

Moving ForwardNo matter the challenge, Roadrunner Markets has shown a business savvy that allows it to rise above the competition. The company was founded in 1977 and opened its first convenience store in 1980. In 2005, it moved into a state-of-the art headquarters that allows the company to house the corporate staff that will oversee its future growth.

As the family-owned company closes in on four decades in business, Broyles still marvels at the business his father created. “My dad started as a tobacco farmer in Tennessee that barely scraped by to graduate college,” he said. “We talk all time about how the industry has changed. He started off by hauling fuel and things steadily grew from there. But if there is one thing my father knew, it was that you had to have customer service that was second to none. We have never deviated from that core belief and it will continue to guide us in all that we do.”

At a Glance: Roadrunner Markets

With 92 stores in four states, Roadrunner Markets is operated by Mountain Empire Oil Co. The business was founded in 1977 by Warren Broyles and opened its first convenience store in 1980. Today, Broyles’ son Ryan serves and president and CEO.Markets: Tennessee, North Carolina, South Carolina and VirginiaNumber of Employees: 800Fuel Brands: BP, Shell and SunocoFoodservice Brands: Java Lane, Subway, Burger King, Huddle House, Krystal, Dunkin’ Donuts, Hunt Brothers Pizza and Chester’s ChickenSocial Media:www.roadrunnermarkets.com, www.facebook.com/roadrunnermarkets, twitter.com/roadrunnermktsExecutive Team:• Warren Broyles, Founder and Chairman• Ryan Broyles, President and CEO• Ralph Fellars, CFO• John Kelly, Vice President and Chief Operating Officer

Giving Back to the Community

Roadrunner Markets has long considered itself a top corporate citizen in its markets of operation. The chain goes out of its way to assist organizations in need. Consider last Christmas, when the United Way of Washington County Tennessee fell short of its annual fundraising goal by $30,000. After hearing about the need, Roadrunner Markets decided to not only help the United Way reach its goal, but put them over the top with a $50,000 donation. “Giving back to the community is a big part of who we are as a company,” said Roadrunner President Ryan Broyles. “We have to help those that support us throughout the year.”

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